S&P 500 futures were little changed on Sunday evening as investors awaited key earnings reports and a major policy decision from the Federal Reserve.
Futures are linked to a broad market index. Ticked 0.02 percent higher. Dow Jones Industrial Average Futures There was a deficit of 14 points. Nasdaq 100 futures rose 0.2 percent.
Blue Chip on Friday Dow It rose 2.51 points, marking a 10th straight day of gains and marking its longest rally since 2017. S&P 500 The week ended up 0.7 percent at 4,536.34, while Nasdaq Composite It fell 0.6 percent to 14,032.81 in the same period.
“Investor sentiment appears to be a bit bearish, so it wouldn’t be surprising for us to see the market flat or trend lower as investors consider selling some of their holdings and pocketing the nice gains they’ve made this year,” said Noah Heyman, CEO of AdvisorShares.
Fundstrat’s Tom Lee agreed that profit-taking will be “part of the investor mindset,” especially for those who have enjoyed “fantastic” year-to-date returns from tech and FAANG stocks.
“It doesn’t mean that when they take a profit, they necessarily have to exit the market,” he told CNBC’s Closing Bell: Overtime on Friday. “If the Fed kind of surprises us because it’s an unusual pause, I think investors are going to look for ways to find stocks that rise when financial conditions ease,” he said. “They might not come back to the FAANG. They might stick with tech, but they might expand into industrials and financials. So yes, profit taking, but that doesn’t mean the market has to go down.”
Investors expect the Fed to raise rates by a quarter of a percentage point at the end of its meeting on Wednesday and will listen to comments from Chair Jerome Powell to get a sense of the central bank’s position on what happens next as it tries to navigate a soft landing for the economy.
They are also looking at the personal consumption expenditure index, the Fed’s preferred inflation gauge, which is due at the end of the week.
The coming week is also set to be the busiest of the earnings season, with Thursday being the busiest day. About 40% of the Dow and 30% of the S&P 500 will give their financial updates this week, including Alphabet, Microsoft and Meta. Several big pharma companies are getting ready to report and it’s also a big week for industrials and oil majors.
—CNBC’s Robert Hume and Sarah Mann contributed reporting.